Cheatham Electric Switching Device Co. v. Kentucky Switch & Signal Co.

280 S.W. 469, 213 Ky. 23, 1926 Ky. LEXIS 441
CourtCourt of Appeals of Kentucky (pre-1976)
DecidedFebruary 12, 1926
StatusPublished
Cited by5 cases

This text of 280 S.W. 469 (Cheatham Electric Switching Device Co. v. Kentucky Switch & Signal Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky (pre-1976) primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cheatham Electric Switching Device Co. v. Kentucky Switch & Signal Co., 280 S.W. 469, 213 Ky. 23, 1926 Ky. LEXIS 441 (Ky. 1926).

Opinion

Opinion of the Court by

Judge Thomas

Affirming.

The appellee and plaintiff below, Kentucky Switch and Signal Company, filed this action under our Declaratory Judgment Law against appellee and defendant below, -Cheatham Electric Switching Device 'Company, alleging in the petition that plaintiff was the owner of four numbered letters patent that issued by the federal government during the years 1921 and 1922 to one Richard R. Scoggan, for certain inventions and devices for railroad switches, -and all of which were assigned' by patentee to the plaintiff, -who was the owner and holder of them. It also- alleged that defendant was the owner of four older patents, the numbers of which are stated, one of which was the pioneer patent of a switching device and the others improvements of its parts, and to which latter class, ás we gather from the petition, were the patents claimed to be owned by plaintiff. It was then alleged that defendant’s patents had expired and were no longer in force and the plaintiff had the right to use them, as -we gather, in connection with its 'Claimed patents, and to manufacture the completed article as composed of the pioneer and improvement patents claimed by defendant as further improved by those owned by plaintiff. It was then alleged that defendant was threatening to sue plaintiff’s customers, under what is plainly inferrable, as an infringement on defendant’s patents, and judgment was prayed declaring plaintiff to- be the owner of its. patents with the right to manufacture and sell the device, and with a like right to manufacture -and sell the contrivances covered by defendant’s patents, and adjudging that defendant was not the owner or any -wise interested in plaintiff’s patents.

*25 The answer denied the material averments of the petition and hy counterclaim alleged it acquired its patents hy assignment from one Cheatham, the patentee of them, in which assignment he agreed to likewise transfer and assign to defendant all other patented improvements that he might obtain in the future of the contrivances covered hy the patents he assigned to defendant, and that Scoggan, the alleged patentee of plaintiff’s patents, was his brother-in-law, and that in truth and in fact Cheat-, ham was the inventor of plaintiff’s patents hut procured the letters patent to issue to Scoggan in order to avoid the terms of his assignment contract to defendant and it prayed for a judgment declaring it to he the exclusive owner of all the patents involved. Neither Cheatham nor Scoggan was made a party to the action. Plaintiff made a motion to dismiss the defendant’s counterclaim upon the ground that the matters therein alleged were of exclusive jurisdiction in the proper federal court, and that the Jefferson circuit court, in which the action was brought, had no jurisdiction of it. The court not only sustained that motion hut likewise dismissed the petition upon the same ground, and disputing the propriety of the judgment dismissing its counterclaim defendant has appealed.

By section 256 of the federal judicial code the federal courts have exclusive jurisdiction “ of all cases arising under the patent right laws of the United States,” including the “infringement of a patent for an invention,” and that jurisdiction has been scrupulously regarded hy both federal and state courts in all cases coming within the purview of that statute. At the same time it is also held that mere questions arising under the patent laws as issuing from, or growing out of an acknowledged patent right, with no disputed title in the patentee as granted hy the federal government, is not “a case” arising under the patent laws, and in such instances the state court has jurisdiction. Illustrations of the latter class of actions are, suits to specifically enforce a contract for an assignment of an acknowledged valid patent; or a suit to recover the contract price for the purchase of manufactured patent devices, and many others which might he given. It is clear that in that class of cases no question concerning the monopolistic right created hy a patent is involved, hut only collateral questions growing out of the ownership of that right. The distinction is. clearly set forth in section 515, volume 1, *26 of Hopkins on Patents, and in the notes to the text a number of federal cases are cited. A leading case in which the distinction is clearly drawn is that of Henry Pratt v. Paris Gas Light and Coke Company, 168 U. S. 255.

In determining-the question of jurisdiction, as is also consistently held'by federal courts, the facts alleged in the initial pleading are to exclusively govern and which in this case is the petition. Under that holding the question of jurisdiction may not be determined by defendant’s counterclaim in this case. And so, the. question is: Whether plaintiff’s petition shows the action to be “a. case” arising under the patent law so as to deprive the state court of jurisdiction?

It is earnestly contended that under the doctrine of the case of American Well Works Company v. Layne, 241 U. S. 257, the petition in this case only alleges a slander by defendant on the title -of plaintiff to its alleged patents and that no shoeing is made by that pleading of an action arising under the patent laws, and that the state court, therefore, had jurisdiction, and the court erred in rendering the judgment appealed from. But we are not inclined to agree with that contention. Whether there was an issue raised by the petition creating a case within, the exclusive jurisdiction of the federal court with reference to plaintiff’s alleged patents, as assignee of Scoggan, we think there was such a case made with reference to the patents claimed to be monopolistically owned by defendant and which plaintiff asserted the right to ignore and to itself manufacture and sell the contrivances covered by those patents. The court below prepared and filed an opinion thoroughly expressive of our views of the case, and instead of repeating its substance we have concluded to insert it verbatim as a part of this opinion, and it is: (1) It cannot, of course, be disputed that the courts of the United States have exclusive jurisdiction of cases arising under the patent laws. This includes cases in which relief is sought against the infringement of a patent, cases in which some right, title or interest under the patent laws is asserted, and perhaps other cases.

“ (2) It is as well settled that a case is not one of exclusive federal jurisdiction merely because a patent is the subject matter of the action. The state courts may try questions of title and may construe and enforce contracts relating to patents. New Marshall Engine Co. v. Mar *27 shall Engine Co., 223 U. S. 473. In that case it was held that the courts of Massachusetts had jurisdiction to decree specific performance of a contract to assign future improvements on a certain patent and a judgment of the state court was affirmed, by which the patentee of the improvements and his assignee, with notice of complainant’s right, were required to assign to the latter in compliance with the patentee’s covenant so to do.

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Bluebook (online)
280 S.W. 469, 213 Ky. 23, 1926 Ky. LEXIS 441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cheatham-electric-switching-device-co-v-kentucky-switch-signal-co-kyctapphigh-1926.